Romanian developers offer buyers furniture as a bonus

Bulgarian entrepreneurs recently launched several offers for those paying cash for a home, with the most generous bonus a 50 square meter apartment for the acquisition of a 100 sqm home. “Developers cannot afford to grant substantial bonuses, as the profit margin could drop below the interest they must pay to the bank financing the investment. Those who choose to do this will be taking a chance of registering losses,” Dan Ioan Popp, President of the Impact Developer&Contractor company, told Business Standard.

For example, if the final price of the apartment includes a garage, which makes up some eight percent of the investment in a home in terms of a developer’s profit margin of 24 percent, the company would have a mere 16 percent profit, which is very close to the 15 percent interest charged by the bank. “We will witness increasingly more generous marketing strategies in this sector, like in the case of the auto industry. We must not forget that the real estate market has copied the auto sector in terms of sales in installments and personalized packages. A recent offer on the auto market is a second car for the acquisition of a more expensive automobile, so we might be in store for surprises on the real estate segment as well,” said Antonio Zarnescu, Commercial Manager of the Gea Prasa developer.

Sales are currently affected by the market’s stagnation, brought about by the international economic crisis. Banks contributed to the worsening of this situation, by restricting access to loans. (G.S.)